9 Aug 2019
VIETNAM: Clarification Issued with Regard to Use of “Made in Vietnam” Designation
In a bid to ensure the “Made in Vietnam” citation is correctly deployed, the Ministry of Industry and Trade (MOIT) has issued a circular specifying the criteria for determining whether goods have been domestically-produced. This circular is a clarification to the existing Rules of Origin (ROO) regulatory requirements, including Decree No. 43/2017/ND-CP (labelling of goods) and Decree No. 31/2018/ND-CP (determination of origin of goods for foreign trade).
The circular reiterates that goods may only be designated as “Made in Vietnam” if they wholly originate in or have been wholly produced in Vietnam. This stipulation applies to live animals, marine and agricultural produce and minerals, as well as to any products derived from them. In the case of goods not wholly originating in Vietnam or not wholly produced within its borders, the final product must have undergone a specified level of transformation in Vietnam in terms of being subject to a minimum level of processing as determined by the applicable product-specific rules. Such a transformation must be marked by a change to two, four or six digits of the product’s Harmonised Commodity System (HS) code.
In the case of goods not requiring an amendment to their HS classification following final processing/assembly in Vietnam (other than items falling under HS Chapters 50 to 63), the value of their imported inputs must not exceed 15% of the Free on Board (FOB) value of the final product in order for them to qualify as “Made in Vietnam”. In the case of items covered by HS Chapters 50 to 63, the weight of their input material must not exceed 15% of the weight of the final product or the value of their imported inputs must not exceed 15% of the FOB value of the final product in order for them to be designated as “Made in Vietnam”.
The move to issue consolidated ROO guidance comes in the wake of recent reports of overseas-manufactured items being re-exported as domestically-produced. Essentially, the government’s advice is that compliance with the existing requirements should ensure that companies will not incur any penalties related to point of origin misrepresentation. It also underlined that different ROO requirements may apply to exports to any of the country’s free trade agreement partners or to any trade conducted under the terms of the Generalised System of Preferences (GSP).